The Government of India has made provisions in the Finance Bill to Tax Deals like Vodafone-Hutchinson happening abroad on Assets and Operations in India retrospectively from 1962. This will discourage Investment in Telecom and other Industries. The Government [Politicians] wants to prove that they are Supreme and can do anything. Well, the Honorable Supreme Court of India is Supreme and I sincerely hope that changing rules of the game with retrospective effect is not at all in the spirit of Investors and Businesses.
700 MHz 4G / LTE Spectrum Auction – Government Realistic on Expectations ? The Finance Minister has set an ambitious target of raising Rs 400 Bn from 2G and 4G Spectrum Auctions within the next 12 months. Additional Rs 182 Bn to be levied as Excess Spectrum Fees on existing operators, which is likely to get challenged in the Court and thus realization within FY2012-13 is uncertain.
Theoretically I believe the amount could be raised, but practically there are many hurdles – as the DoT is focused on 2G auction since that is critical given the Supreme Court order. As stated by the DoT, it believes the earliest that 2G auction will begin is in December 2012. This is despite the availability of the 2G spectrum. For 4G / LTE 700 MHz, given the spectrum is not yet vacated and considering that it could be conducted after 2G auction, I am reasonably certain that the auction would not happen by the end of FY13 and may be pushed to FY 14.
With the Telecom industry still recovering from the 3G investments, 4G / LTE 700 MHz Auction is highly unlikely to be as successful as 3G Auctions. The semi-paralyzed Government actually needs to start from developing a Roadmap for the Telecom Industry first and then take up auction, but who will make the Arrogant and Stubborn understand ?